L.A. Unions Lose Appeal of $4.3 Billion in Pension Cuts on a Technicality

Unions objecting to a unilateral $4.3 billion cut in pensions by the city of Los Angeles lost their appeal on a technicality last week when a hearing officer ruled they missed a 90-day filing deadline.

Officer Luella Nelson’s 23-page report, which will be considered by the city’s Employee Relations Board, recommended that the challenge to a city council vote in October 2012, which established a new, lower-compensated tier of employees, be denied. The council approved the labor change, which applies to new hires after July 1 of this year, following failed negotiations with labor leaders.

The Coalition of L.A. City Unions was outraged that the council would vote on a contract that wasn’t reached through negotiation and said it was a violation of city and state laws. The council action was supported by then-Mayor Antonio Villaraigosa, who used to have a consistent record of staunch union support. It was also supported by current Mayor Eric Garcetti, who voted for it while on the council. Garcetti’s opponent, Wendy Greuel, opposed the deal and was skewered by the media during the election for her union ties.

The five-member board will consider the matter next month. City Administrative Officer Miguel Santana told the Los Angeles Times that the negotiations were going nowhere. The two sides couldn’t agree on whether the talks were even necessary, much less approach accord on substantive issues.

Although the city council vote was in October and the unions filed their objection in December, Nelson said the unions were supposed to file within 90 days of learning what the city was about to do to them.

Los Angeles, like many municipalities, is struggling mightily to deal with escalating pension obligations in the face of economic stagnation. L.A.’s new rules would raise the retirement age for new hires from 55 to 65, put less money in their pensions and cap cost-of-living adjustments. Retired workers would not be allowed to put their spouses on their health care policies.

Those kinds of changes have traditionally been agreed to in labor negotiations. But a diminishment in labor’s power the past 30 years and a crappy economy have put unionized workers on the spot.

A Field Poll (pdf) released last week found that California voters are turning on unions. In March 2011, by a margin of 46%-35%, voters said unions did more harm than good. Now they feel the opposite, 45%-40%. Those polled feel about the same whether the unions represent employees in the public or private sector.

“Virtually every voter subgroup now displays a shift toward a somewhat more negative view of labor unions than they had expressed previously,” the pollster wrote.